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CoverStory
Fail fast As OmnyPay's Chief Marketing Officer, Malhotra looks
beyond payments to "all the other stuff that happens in re-
Inventors who have taken products from concept to tail." Earlier mobile wallets were too generic and payment-
production have said the process will challenge the best centric, Malhotra noted, citing CurrentC as an example.
business plans. Starving artists who stay the course win
no accolades in Silicon Valley, where ideas are expected CurrentC was developed by Merchant Customer Ex-
to rapidly monetize and scale, and the prevailing wisdom change, a consortium of retailers who couldn't tell each
often imparted to hopeful entrepreneurs is, "Go big or fail other what they were working on, but were supposed to
fast." be a coalition. To make matters worse, they had heavily
invested in loyalty and coupon schemes that represented
If only Softcard, a mobile wallet formerly known as Isis, their core tenets and competitive strategies. So why cre-
had failed fast. The company formed an unlikely union ate a coupon that could be used universally across MCX
with Verizon Wireless, AT&T and T-Mobile in 2010 member stores? It would effectively remove the differen-
and spent the next four years trying to bring a mobile tiators and business philosophies from the equation, Mal-
wallet to market. Payments industry veteran Amitaabh hotra said.
Malhotra was co-founder and Chief Operations Officer at
DeviceFidelity Inc. from 2007 until 2015, when Square Inc. Another problem with CurrentC was its dependence on
acquired the technology company. The company designed automated clearing house payments. "You'd have to offer
a near field communication (NFC) platform that was later a spectacular deal for consumers to change their behavior
used in Softcard's mobile wallet. or expose their banking credentials to a group of retailers,"
he said. "They'd be just as happy to use private-label store
Malhotra noted that the company created an NFC module cards or debit cards, which are familiar and pose less risk."
using a memory CD slot at a time when few NFC products
were in the market, and there were ongoing arguments And finally, introducing a new mechanism that is not top
about who would control the secure element. of mind for consumers is no easy task. "When I'm shopping
at Target, I'm not thinking about Apple; I'm thinking about
"Our solution predated Apple Pay, so we created a protec- Target," he said. "When I go to pay, MCX and CurrentC
tive case with NFC functionality to enable iPhones to run are not top of mind. The store brand experience, not the
the Softcard mobile app," he said. "We worked with Soft- payment method, is top of mind."
card for three years, solved device availability, certified
the product and got the card brands ready to do it, but in Start small
the end, they just couldn't get their coalition and business
model right." Malhotra would like to see solutions aimed at improving
the retail experience by moving payments into the
Ask the right questions background. He recalled the first version of the Starbucks
app; it was just the basics and it worked. It moved gift to
Malhotra said Softcard focused more on making money a barcode; that was it. Over the years, Starbucks added
than on what consumers and merchants wanted. "If you're more features, like topping up electronically, and ordering
a payment network competing against Visa and Master- ahead.
card, what are you doing that they're not already doing?"
he said. "Why would the market need a payment network "Loyalty and coupons were the main friction point, so they
that charges more and shifts liability for chargebacks and addressed that first and added features later," he noted.
fraud to merchants?" "The beauty of the age we live in is that we can continue to
add new features every month."
Softcard tried different value propositions, from sharing
transaction revenue and charging banks to issue the wallet Malhotra pointed out that Uber also made it easy for
to charging merchants for coupons and loyalty, but in the consumers. Open the app and a taxi shows up, with no
end, the moving pieces didn't fit. "Before Google launched third party involved. Just begin with the most minimal
their wallet, they offered to partner with Softcard and put solution and a sound underlying value proposition, he
the app in every Google phone," Malhotra stated. "Soft- said.
card wanted everything and ended up with nothing."
Darrin Ginsberg, Chief Executive Officer at Super G
Solve for human need Funding LLC, a Newport Beach, Calif.-based small
business lender, concurred. "My suggestion is test on a
Malhotra moved on to OmnyPay Inc., a San Francisco- small scale first, before developing a full-blown marketing
based company founded in 2014, with a white-label mobile plan," he said. "Scale it back as a small test at tradeshows
commerce solution that powers Kohl's Pay and other lead- or swap meets to validate that the market is interested in
ing retail apps. Its ability to aggregate reward, loyalty and your product."
payments in a simple interface has helped the platform
achieve global scale, Malhotra said.
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